The 20 biggest companies that have filed for bankruptcy because of the coronavirus pandemic


Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.

Get ready for a boom—in bankruptcies.

“We are seeing an acceleration in bankruptcies that is unprecedented,” said James Hammond, CEO of New Generation Research which runs BankruptcyData. For 2020, he says, “I’m pretty confident we will see more bankruptcies than in any business person’s lifetime.”

Ranked by assets alone, says Hammond, the magnitude of bankruptcies this year has already surpassed that of 2008. And that’s not including what could happen when the government’s Paycheck Protection Program, which aims to keep small businesses up and running with loans that can be converted to grants if certain terms are met, runs out.

The largest Chapter 11 bankruptcy so far has been that of car-rental company, Hertz. Unable to hold on after the travel industry effectively hit the brakes, the company is now selling off much of its fleet in a bid to meet demands from creditors. Others in sectors ranging from oil and gas, to retail, to aviation have similarly suffered to navigate the pandemic.

bankruptcydata

Editor’s note: Chesapeake Energy, an oil and gas company, filed for bankruptcy protection on Sunday. With assets of roughly $16.2 billion and liabilities of $11.8 billion, the filing represents the fourth largest bankruptcy by assets so far in 2020, above that of Intelstat’s.

Notably, Chapter 11 bankruptcy filings means a company is struggling, but doesn’t mean that it will cease operating.

“You have an enormous pile of corporate debt that has been accumulating, which the debt and restructuring world had been concerned about for a couple of years, and all of a sudden in the space of almost no time at all, investors are asking questions about the ability to service debt,” says Hammond. “08′ 09′ was a financial crisis. This is now everywhere.”

By sheer number of bankruptcies, restaurants have been the hardest hit, per rankings from Bankruptcydata. Recently, CEC, the company behind restaurant and entertainment venue, Chuck E. Cheese, closed down locations and filed for bankruptcy protection as the coronavirus shuttered restaurants led to challenges for live-events companies.

Even as the U.S. reopens, Hammond is not optimistic. Bankruptcy filings, notes Hammond, are a lagging indicator. Now he says, “we are at the waterfall.”

More must-read finance coverage from Fortune:

  • Why black-owned businesses were hit the hardest by the pandemic
  • George Floyd protests force Britain to reckon with its role in slavery, leading some companies to pay reparations
  • This influential crypto CEO warns that hyperinflation will be “the next big problem”
  • Looking to invest in companies that care about equality? This NAACP-backed ETF may be the answer
  • 6 reasons Boeing’s financial picture may be brighter than most assume

Latest articles

Are Russia and Belarus Decoupling?

Credit: kremlin.ru Belarusian President Alexander Lukashenko is fighting...

Kelly Preston Dies of Breast Cancer at Age 57

Kelly Preston has died at age 57. On Sunday, a rep for the actress's family confirmed the news to...

Watch the first trailer for Far Cry 6, featuring Giancarlo Esposito

Ubisoft debuted the first trailer for Far Cry 6 as part of its Ubisoft Forward digital conference today. The cinematic trailer...

B.C. officials warn of possible COVID-19 exposure at events in Kelowna

B.C. health officials issued a sweeping warning on Friday about possible exposure to COVID-19 in Kelowna, covering anyone who attended public and private...

Related articles

Leave a reply

Please enter your comment!
Please enter your name here